Fashion retailer Revolve Group Inc. saw its earnings rise in its fiscal Q4, as net sales increased by 10.4% year over year to $324.37 million and the company detailed its latest investments in artificial intelligence (AI).
Those technology priorities have included recommendations, marketing and styling advice, as well as customer service.
In the meantime, beauty product sales surged, up 43% year over year, with growth in almost all categories leading the retailer to improve net sales, where its rate of improvement more than doubled from Q3.
Revolve Group ranks No. 85 in Digital Commerce 360’s Top 2000 Database, which ranks the largest North American online retailers by annual ecommerce sales. The company appears in the Apparel & Accessories category.
What Revolve Group’s leadership said about Q4 earnings results
Company executives painted a rosy outlook for 2026.
“We achieved these strong financial results while continuing to invest in many initiatives that we are very excited about, and which we believe set us up well for continued profitable growth and market share gains in 2026 and beyond,” said Mike Karanikolas, co-founder and co-CEO at Revolve.
Michael Mente, also co-CEO at Revolve, credited AI with spurring sales.
“We are confident that our culture of innovation and technology DNA will allow us to remain a leader in the continued wave of AI innovation, driving higher conversion and efficiency,” Mente stated.
During Revolve’s earnings call with investors, Karanikolas cited specific instances where he sees AI making a difference.
“On our ecommerce websites, we drove several million dollars in annualized revenue gains by launching AI-driven personalization enhancements and meaningfully enhancing our proprietary AI search algorithm for improved product discoverability,” he stated. “In product merchandising on our sites, we drove increased consumer engagement and conversion through AI enhancements to our product recommendations and launched an AI styling feature, enabling shoppers to virtually style recommended items.”
Moreover, Karanikolas sees potential for “an internally developed generative AI feature” for the Revolve website, where he believes the tool “will enhance the customer shopping experience by surfacing contextually relevant Q&A about each product.”
Other highlights from the Revolve Group’s Q4 results:
- Net income increased 58%.
- Adjusted EBITDA rose 44% in Q4.
- Full-year 2025 net income was up 25% to $61 million.
- Gross profit was $172.9 million, an increase of 12% year over year.
- Revolve segment net sales were $276.6 million, a year-over-year increase of 10%.
- FWRD segment net sales were $47.8 million, a year-over-year increase of 14%.
What’s working for Revolve
Emmanuel Tamrat, a fashion ecommerce consultant and founder of the Blindspot Agency, pointed to Revolve’s in-house brands as a key differentiator. Tamrat said the best multi-brand ecommerce retailers get their sales from a fairly even mix — usually 10%-20% each — of paid search, paid social (ads and influencers), organic search and social, email and affiliate programs, such as Revolve Ambassadors.
“Revolve does all of these, but a big differentiator is that about 20% of their sales come from high-margin in-house brands,” Tamrat assessed. “Given the need for constant discounting, high pay-per-click costs, and lots of competition killing margins, the strength of their in-house brands is a huge contributor to their strong numbers.”
Tamrat added that Revolve also generates substantial organic traffic by ranking for keywords such as “cocktail dresses” (non-branded), “Revolve dresses” (branded) and influencer-driven searches.
Tamrat said Revolve is also reducing friction in the ecommerce experience.
“They have a super fast website and mobile experience paired with fast two-day shipping and easy returns,” he stated. “These are major drivers of conversion, particularly for first-time shoppers, who make up the bulk of ecommerce traffic.”
Revolve’s pricing strategy and product mix
In addition, Tamrat lauded Revolve’s product mix and pricing strategies.
“Revolve is obviously staying competitive with strong discounting, but they are also nailing their buying with a mix of designer staples, trending pieces and a strong core of bestsellers like the Revolve exclusive brand Helsa,” Tamrat said.
He specifically mentioned Helsa’s association with supermodel and influencer Elsa Hosk, noting popular items like the bubble hem trench coat, which sold more than 40 times in 48 hours at full price ($737).
“Considering the average order value for luxury ecommerce is around $300 to $400 — what I use at Blindspot Agency for client modeling based on several thousand brands — it’s easy to see why Revolve is reporting strong profitability,” Tamrat said.
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